A few things came up recently that have led me to this conclusion.
- A long conversation with a socialist friend who loves a good debate
We’ve all noticed the prices going up at the bowser. Fossil fuels aren’t dead by a long stretch. Europe is tying itself in knots trying to reach renewable energy targets like it’s a race. Germany has rooted its industry by first relying on Russia for fossil fuels and then by shutting down its nuclear power industry. Several countries have promised to ban the sale of fossil fuel vehicles by 2030. This is very close indeed. IMO it won’t happen because the transition will be so badly managed that widespread suffering will be the result.
The banning incandescent lightbulbs in Australia should never have occurred. At the time in 2006, CFL bulbs were the main alternative. A few years later LED bulbs were widespread and have replaced CFL because they were superior in every way, and cheaper. Who would buy incandescent today given the choice? A few people who believe in the benefits of full spectrum lighting, but not many.
EVs are already quite driveable but problems with range, upfront cost, recharging times, the distribution of charging points, and the electricity grid are not yet solved. EV makers are already incentivised to solve these problems. An artificial deadline imposed by governments will not make them solve these problems faster, and might even disincentivise them because their market will grow whether they improve or not.
The bigger problem is the degree of unity among elites that this is what must be done. ESG AFAIK means maxing on renewable energy ASAP plus maxing on race diversity. These things get repeated all the time now in the sychophant’s guide to the Australian elite (the AFR). The survey by Deloitte in my links above, as reported by the AFR, says
“The 2022 Deloitte CxO Sustainability Report, which surveyed 102 Australian business chiefs, found 74 per cent of Australian executives believe the world must act now to minimise the impact of climate change, up from 52 per cent one year ago.”
Do we really think that in the space of a year 25 or so more top execs changed their mind after careful consideration of the facts and theories. I don’t. This is groupthink in operation. Changes of mind like this are reminiscent of lead up to the gay marriage poll. They don’t represent a purely rational evaulation of the truth of the substance of each side of a debate. Instead, they represent a triumph of the human need to fit in to the group that is perceived to have the greatest influence. So who is it that is perceived to have the greatest influence and how did they get there? Part of the answer is that Australian elites follow the example of their foreign funders be they Chinese or American. A shift away from China during COVID might explain some of this. Isn’t democracy supposed to throw up alternative views to select from? Where are they?
Either way, provided you can reasonably calculate how long the truth can be ignored, there are some investing opportunities here. Also, ordinary people will not benefit.